Data Mixed
Opinion: The indexes closed mixed yesterday with positive internals on the NYSE while NASDAQ internals were negative. Volumes rose on both exchanges from the prior session. The large caps lost ground while two other indexes made new closing highs. What may be of greater import was the action on the NDX discussed below. The data is mixed with a slightly cautionary tone. Yet until we see violations of the current near term uptrends, we remain of the opinion said trends should be respected until proven otherwise.
- On the charts, The SPX (page 2), DJI (page 2) and COMPQX (page 3) closed lower on the day while the DJT (page 3), MID (page 4), RTY (page 4) and VALUA (page 5) all advanced with the RTY and VALUA making new closing highs. However, there was some cautionary action seen on the NDX (page 9) that warrants some discussion. Four of the “FANG” stocks saw weakness on volume that, given their market weighting, pulled the NDX below its 50 DMA and all the way down to its intermediate term uptrend line. The weakness occurred on fairly heavy volume. Any further weakness there could, in our opinion, turn that picture more negative. And since the FANG stocks and NDX have seen such intense buying interest over the past several months, a further break could be more problematic for the markets as a whole. However, we would stress that such a break has not yet happened. For the rest of the indexes, all of the near term uptrends remain intact as do the cumulative advance/decline lines.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.
- The data is mixed. All of the McClellan 1 day OB/OS Oscillators are neutral while the 21 day readings are overbought (All Exchange:+33.39/+75.18 NYSE:+35.2/+87.78 NASDAQ:+33.7/+67.39). The Total and Equity Put/Call Ratios are neutral at 0.7 and 0.64 respectively but the OEX Put/Call Ratio is very bearish at 3.73 as the pros have loaded the boat with puts. The Open Insider Buy/Sell Ratio is Neutral (38.3) as is the new AAII Bear/Bull Ratio (28.0/36.37).
- In conclusion, we remain of the opinion that the near term uptrends of the indexes should still be respected. However, the NDX should be closely monitored for possible negative impact.
- Forward 12 month earnings estimates for the SPX from Bloomberg of $137.37 leave a 5.56 forward earnings yield on a 18.2 forward multiple, over a decade high.
SPX: 2,475/NA
DJI: 22,047/NA
NASDAQ: 6,361/6,461
DJT: 9,382/9,710
Mid: 1,740/1,781
RTY: 1,414/NA
VALUA: 5,589/NA